Phrases like ‘peaking power’, ‘energy storage’, and ‘firming capacity’ are becoming more and more common in the national conversation about the energy transition. But what do all these terms have in common? The answer is flexibility.


Changing supply and demand dynamic

As we’ve explored in a previous article, the average household energy demand profile has changed considerably. It is less a traditional, flat line, and increasing resembles a duck-shaped curve as rooftop solar has become more widespread. Often, the result is excess supply in the market in the middle of the day, before a growing demand on the market later in the day as rooftop supply decreases and people arrive home from work and school.

During certain periods – most notably during very hot days in summer – these peaks and troughs in supply and demand are further accentuated (in this case, by air-conditioning use) – making the ‘duck curve’ even more pronounced.

Traditional baseload power (like coal-fired power plants) lacks the ability to easily ramp generation up and down. Switching units on and off can be an expensive and complicated process, so it is generally more cost-efficient over the long-term to run them 24 hours a day for long periods of time, even when some of that energy is going unused.


The case for flexible generation

This is the case for flexible generation: it adapts easily and relatively quickly to changes in demand.

Unlike baseload power, flexible generation (like gas-fired peaking power stations, pumped hydro, and grid-scale batteries) has the capacity to ramp up or ramp down output (or even switch on and off) as needed. And importantly, it can do it quickly.

Australia’s energy future will be affordable and smart – delivered from renewable sources that are backed by flexible energy storage and generation technologies which come together to power our homes, our businesses, and our lives.

But what do these technologies look like?


Big batteries

Large-scale batteries – also known as grid-scale batteries – will be pivotal to providing firming capacity in the energy transition. This removes one of the biggest limiting factors of renewable energy – by providing electricity anytime, but particularly during times of peak demand.

On 14 August 2020, we announced we had lodged a scoping report with the NSW Government for a grid-scale battery system to be located on the Liddell Power Station site, alongside the existing power station. The Liddell Battery is part of the 850 MW multi-site integrated battery system we’re targeting to develop by FY24. Other sites are also being investigated, including for a battery at Torrens Island Power Station in South Australia.

The new multi-site integrated battery system is a major step forward, and it builds on our previous support of battery projects like Dalrymple, Maoneng, and Wandoan.

The 30 MW ESCRI battery at Dalrymple on South Australia’s Yorke peninsula is not the nation’s biggest battery – but it has the distinction of being the first large-scale and grid-connected battery designed, built, and operated in Australia.

More recently, we partnered with Maoneng Group to secure capacity on four 50 MW batteries in NSW. Under the deal, AGL can call on capacity as required from the batteries at a fixed price for 15 years – thereby locking in the price of electricity during peak periods.

Additionally, we announced a similar arrangement with Vena Energy to progress a 100 MW Battery Energy Storage System (BESS) in Queensland – the first battery in Australia to be fully supported by a commercial transaction without government support.

The Maoneng batteries will store enough energy to power 30,000 homes, and the Vena BESS enough to power 57,000. However, like gas peakers and pumped hydro, continuous grid supply is not the main purpose of grid-scale batteries – rather, it is to meet peak demand.

Additionally, while some forms of flexible generation (like gas-fired peaking power plants) have a response time of a few minutes, the response time of grid-scale batteries is a few milliseconds. That means batteries can be used to help regulate the grid, responding to fluctuations in the network almost instantaneously.


Gas-fired peaking power plants

These plants – known in short as ‘gas peakers’ – are rapidly responsive thermal generators that can quickly react to a sudden onset of demand.

Take the newly completed Barker Inlet Power Station (BIPS) on Torrens Island in South Australia. BIPS uses 12 reciprocating engines running on gas to produce 210 MW of power – and it can ramp up to full capacity in as little as five minutes.

BIPS came fully online earlier this year and it is much more efficient than its neighbouring Torrens A power plant, requiring 28% less fuel than the Torrens A plant. It’s also much cleaner than the Torrens A plant, reducing greenhouse gas emissions by around 35-50%.

AGL is also planning a gas-fired peaking power station in Tomago, NSW with a nominal generating capacity of 250MW. The project is currently progressing through approvals, with construction expected to begin in 2021 and be operational in the following year.  

While some gas peakers are capable of continuous operation, they are only elevated to those levels if certain circumstances in the NEM are met – otherwise, they remain ready to ramp up and provide peaking power when the grid needs it. For example, the proposed Newcastle peaker is estimated to have between 50 and 200 starts per year.


Pumped hydro

Pumped hydro is another example of flexible generation and it works by ‘saving’ electricity for use when it’s needed most.

So how does it work?

Excess energy produced during the day – for example, from renewables during sunny periods of the day – is used to pump large volumes of water to a geographically high point; then, when demand increases and more supply is needed, the water is released back to the lower point – spinning turbines along the way to generate electricity. In this way, excess power can be stored for when it’s needed.

Pumped hydro plants are also a novel use for decommissioned mining sites – such as the pumped hydro project at Bells Mountain near Muswellbrook in NSW.

The 250 MW project is proposed for the void on the Muswellbrook Coal Company site, which is no longer being mined. AGL is currently working with resources company Idemitsu to conduct a feasibility study on the site.


Into the future

The energy market is changing dramatically – and that is the reason that peaking power is so important. We want the transition to a new energy future to be a smooth as possible, and the way we can achieve that is through flexible generation – whether through traditional, flexible options like gas peakers, or new technologies, like our Virtual Power Plant in South Australia.

We’re investing to ensure we can meet the needs of the current and the future energy market, and the communities and customers who rely on it.